With slower monthly sales over recent months, the region’s overall inventory levels have risen to the highest level of the year. The 2,714 homes available in September represented just over a 1% increase from the previous month. However, inventory levels have declined, year-over-year, for the sixth consecutive month, with 3,278 homes on the market last September resulting in a 17% decrease. Current inventory levels are still running about 70% below where they were a decade ago and less than half of where they were just prior to the pandemic.
“It’s good news for buyers that we are seeing monthly increases in inventory,” said Kelley Nisbet, president of Bluegrass Realtors®. “But those increases are a result of slower sales, not necessarily from more homes coming online. The market needs an influx of new listings to satisfy demand which may also slow down price increases.”
September’s new listing total continued a seven month stretch of all-time monthly lows, with 1,422 new properties hitting the market. This is down 14% from last year’s 1,651 new listings and down 9% from August.
Home sales continued to struggle as the 1,106 transactions for September were down 19% from the previous year’s 1,367 total and down 11% from the prior month. Single-family home sales for the month stood at 1,048, a drop of 17%, while townhouse/condo sales were 58, a decline of 42% year-over-year.
New construction sales dropped to 95 in September, down from 121 last year, a 22% decline, and a 10% decrease from August.
The continuation of slower sales has pushed up months of inventory in September to the highest level since the first of the year. Months of inventory hit 2.5 months, up 4% from a year ago and 14% from the previous month. Although moving in a direction more indicative of a level market, available inventory levels have floated at historic lows since the start of the pandemic. A six-month supply is considered a balanced market.
Although days on market (DOM) in September dropped two days from the previous month, the monthly number marked 14 consecutive months of year-over-year increases. Homes sold on average in 33 days compared to 35 days in August, an increase of 6%, and 25 days last year, a jump of 27%. The median DOM climbed by two days year-over-year, from 10 days in August 2022 to 12 days this year, a 20% increase.
“Home prices are still increasing, just not at as fast as they were several months ago,” said Nisbet. “Interest rates have certainly played a role in the reduction, but inventory volume and selection need a boost going forward to calm appreciation. When and if rates fall, however, demand could once again spike and appreciation could go up with it.”
September marked the 55th consecutive month of year-over-year price appreciation. However, for the past twelve months, year-over-year price appreciation has remained in the single-digits.
The median home price in September hit a monthly high of $255,000, a 6% jump over last year’s $240,000, but down 2% over the August median of $260,000. Single family homes peaked at $255,000 while townhomes/condos hit $260,000. Year-to-date, median prices are up 6% ($255,000) compared to 2022 ($241,500).
Total volume of residential real estate sold hit just under $328 million, a 14% decline over last year’s total of $382 million. On the year, total sales volume surpassed $2.8 billion through three quarters of the year, down 16% from the 2022 total of $3.4 billion.
Pending sales in September dropped 12% from the previous year with 1,089 homes under contract compared to 1,238 last year. Month-over-month, pending sales were down 11%.
“All the statistical categories in September mirrored what has been seen through most of the year,” continued Nisbet. “The biggest driver in the market currently appears to be the interest rate. But as it’s been said before, you should date the rate and marry the house. Mortgages can be refinanced when rates drop but you can rarely, if ever, go back and buy your dream home.”
Interest rates ended September at the highest level of the year with an average of 7.2% and was also the highest monthly rate on record for almost 23 years (December 2000). This is compared to 6.1% last year and up from 7.07% the previous month. Even as rates hover at 8%, the Mortgage Bankers Association is predicting that rates will fall to the mid-6% range in the first half of 2024 and land around 6% by the end of next year.
As the region’s leading advocate for homeownership, Bluegrass Realtors® understands the value and joy of owning a home. The Association represents more than 4,000 Realtors® located in 30 counties: Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Estill, Fayette, Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Lee, Madison, McCreary, Menifee, Montgomery, Nicholas, Owsley, Powell, Pulaski, Rowan, Russell, Scott, Wayne, Whitley and Woodford counties. Visit www.bluegrassrealtors.com for up to the minute real estate listings and buying and selling resources.